Canadian Hospitals That Spend More on Patients Get More

By Drew Armstrong -
Mar 14, 2012

Canadian hospitals that spent the
most on patient care may be getting a bigger bang for their buck
than their U.S. counterparts, researchers suggested.

A study reported in the Journal of the American Medical
Association compared patient results between Canadian hospitals
that spent more on care, and those that spent less. It found
patients in the first category had lower death rates and were
less likely to be admitted to intensive care.

Research on the U.S. health-care system, however, has shown
that higher spending at hospital systems doesn’t guarantee
better results, according to the study’s author, Therese Stukel.

“When we spend more, and when we place these specialized
resources, we’re doing it in an efficient way,” said Stukel, a
senior scientist at the Institute for Clinical Evaluative
Sciences in Toronto, in a telephone interview. “That’s in
contrast to the U.S.”

Under Canada’s system of universal health care, patients at
high-spend hospitals had longer lengths of stay and more
specialist visits, the study found. That’s because the health
plan in Canada, where per capita health expenditures are 57
percent of those in the U.S., better allocates expensive
specialists and technology, Stukel said.

While the U.S. has a 3- to 4-times higher per capita supply
of expensive, specialized technology, such as MRIs, it has a
similar supply of hospital beds and nurses as Canadian
hospitals, according to the study.

Dartmouth Atlas

The Canadian findings may help to better understand studies
such as the Dartmouth Atlas of Healthcare, a 20-year research
project that has documented variations in how medical resources
are distributed in the U.S. The data has shown that the parts of
the country that spent the most per patient have worse patient
outcomes than low-spending areas.

The Canadian study “breaks through the generalization,”
that all spending is bad, said David Goodman, co-principal
investigator at the Dartmouth Atlas, in a telephone interview.
“It’s important that we look at spending in the aggregate and
where more is better, and where more is worse.”

The U.S. health-care law signed in 2010 has several
components designed to slow spending and have U.S. hospitals
emulate the coordinated care of their Canadian brethren. Those
measures haven’t been without controversy. Republicans are
seeking to repeal the law’s Independent Payment Advisory Board,
which will cut Medicare rates with limited oversight from
lawmakers.

The law’s Accountable Care Organizations have Medicare pay
hospitals bonuses when they coordinate to provide better care
and save money. Health systems are penalized if they overspend
or produce worse outcomes.

Misinterpreting Dartmouth

In an editorial accompanying the research, Karen Joynt and
Ashish Jha, researchers at the Harvard School of Public Health,
said some policymakers have drawn wrong conclusions from the
Dartmouth data.

“What Dartmouth investigators have documented through
careful work is that dysfunctional systems produce expensive,
poor-quality care,” Joynt and Jha wrote.

Stukel’s Canadian study examined nearly 400,000 cases of
heart attack, heart failure, hip fracture and colon cancer in
Ontario hospitals over 10 years, looking at whether the patients
died or were readmitted.

The most expensive Canadian hospitals in the study spent
about twice as much per patient than their lower-spending
counterparts. For every condition the study looked at, patients
died less often and were readmitted less often at the more
expensive hospitals.

Expensive Hospitals

Those more expensive hospitals had something else in common
-- they were often academic hospitals, or community hospitals
that saw more patients than others, they had cancer centers
attached, lots of specialists on staff, performed more advanced
procedures, had more technology and nurses that spent more time
with patients. Patients were also more likely to get a follow-up
visit within a year and get more intensive discharge care.

“Sometimes it just costs more money to have better
outcomes,” Dartmouth’s Goodman said.

That’s not to say that putting more money into lower-
spending Canadian hospitals would produce better care there.

“It would be facile to interpret this study as
demonstrating that higher spending is causally related to better
outcomes and providing more money to lower spending hospitals
would necessarily improve their outcomes,” Stukel and her co-
authors said in the study.

Instead, it’s better care coordination and spending on the
right types of care that improve outcomes, as well as limited
budgets on overall spending, Stukel said.

Coordinated Systems

Stukel said she doesn’t advocate a Canadian-style system of
universal coverage in the U.S. She said that coordinated U.S.
managed care systems, like Kaiser Permanente in California,
Intermountain Healthcare in Salt Lake City, and Geisinger Health
System in Pennsylvania are models the rest of the country
emulate.

She predicts that Canadian hospitals will likely use her
study to ask the government there for more money, even though
that’s not the point of her research.

“If we put more dollars into the acute care system, it
might still improve, it might peak,” she said. “It’s not just
putting money into the system, it’s where we spend it.”